While some crypto mining equities may be undervalued by investors, others are value traps where stocks look cheap after a long period of stagnation but eventually fall even further. There is a possibility. report From Valkyrie.
“Value stocks are the ones that will survive and the price is likely to bounce back, value stocks will stop mining and will never surpass their previous highs,” wrote the digital asset-focused wealth manager. ing.
Against the backdrop of major cryptocurrencies like Bitcoin (BTC-US Dollar) and Ethereum (ETH-US Dollar) has fallen by as much as 70% from its peak in November 2021, leaving Marathon Digital (NASDAQ:Mara), Riot Blockchain (NASDAQ:Riot) and Hut 8 Mining (NASDAQ:hut) plummeted even further, in some cases selling some of its crypto assets and mining machines to free up capital.
Valkyrie emphasized that the miners with the lowest debt burden, the highest assets and liquidity, and the highest historical profitability are likely to weather the prolonged market downturn.
Conversely, a company with negative cash flow may need to raise new capital or cut spending to improve profitability.
Miners with small holdings of cryptocurrencies compared to their market capitalization are: HIVE Blockchain Technologies (NASDAQ:hive), bit digital (NASDAQ:BTBT), CleanSpark (NASDAQ:CLSK), Stronghold Digital (NASDAQ:SDIG) and the Greenwich Generation (NASDAQ:Gree). This group of miners could be seen as a “defensive” name, as liquid assets are less likely to fall in value if cryptocurrency prices continue to fall, Valkyrie said. I’m here.
The following set of miners are said to hold more crypto relative to market value and have more leverage over a potential rebound in crypto: DigiHost Technology (NASDAQ:DGHI), Hut 8 (hut), Marathon Digital (Mara) and Core Scientific (NASDAQ:colts).
Earlier this week (September 6), short Bitcoin investment products saw record inflows. crypto slump.